What's going on?
Airbus reported better-than-expected earnings on Thursday, but the plane manufacturer can still only see the pandemic on the horizon.
What does this mean?
Here’s the good news: Airbus managed to deliver more aircraft than analysts were expecting last quarter. And since plane manufacturers only get paid in full once they actually deliver the goods, that meant the company ended up getting its hands on more cash than it expected.
Now for the bad: the travel-halting pandemic is still eating into Airbus’s profits. And despite last quarter’s strong momentum, the company is bracing itself for even more uncertainty. That might be why it’s only expecting to deliver as many aircrafts this year as it did in 2020 – a year when production was 40% below its peak. Needless to say investors had loftier expectations: they’d expected deliveries to rise, and they sent its stock down.
Why should I care?
For markets: The airplane manufacturers are locked in a tussle.
At least the French company is doing better than Boeing: Airbus not only delivered more planes than its American competitor last year, it actually took new plane orders too. All Boeing’s been taking is cancellations as it continues to reel from the trouble with its 737 Max airplanes. That means Airbus is still outpacing its arch-rival – a sure-fire way to dig the boot in after poaching the coveted title of world’s biggest aircraft manufacturer a year ago.
The bigger picture: Airbus is saving our skies.
When the aviation industry finally does recover from the pandemic-induced slump, Airbus is betting environmental concerns will be more important than ever. So it’s been upping its investments in climate-friendly airplanes, and last year even revealed three concepts for the world’s first hydrogen-fueled, zero-emission commercial aircrafts that could take to the skies by 2035. And sure, Boeing’s recently committed to delivering planes that can fly on 100% sustainable fuels by 2030, but that’ll only lower emissions by 80%. Pfft.